The "scalper" situation may improve due to plummeting price in Hong Kong

[haruhiko]

The price for an unopened iPad 2 Wifi 16GB/32GB on some popular online forums of Hong Kong (e.g. www.discuss.com.hk / www.uwants.com [in Chinese]) has dropped to about ~US$602/~US$730 already, which is just about 7%-10% higher than the price in the US plus tax.

Many individual scalpers are forced to sell their iPad 2s with a very small profit or at break-even if we take the shipping cost into account.

I hope that the scalpers in line will disappear very soon in the US so that the real users can enjoy their new toys in a short time.

 

[X2468]

There is no "scalper problem"

It's one of two labels many like to use.

1) Troll
2) Scalper

I've been in lots of lines waiting to buy new products since Apple first opened their stores. I go with a few friends and we have fun while waiting.

There's only one time recently I noticed what appeared to be a true scalper. But so what? Why get upset? They're scalping tickets & all kinds of things. It's a fact of life. No big deal.

 

[iPad2Reseller]

America is a free market system, then throw in the gray area of international sales via eBay and you'll always have "scalpers."

It all boils down to how much is your time worth. Is your time worth $30/hour? Why wait in line for 5 hours a day for 3 days straight, when you can just pay a $200 premium to buy one from somebody whose time is not as valuable as yours.

If you need an iPad that badly, buy an iPad 1, use it for a month, return it for a $45 restocking fee, then buy the iPad 2 when supplies are replenished. You're only out $45 bucks and you didn't have to wait in line for hours on end.

 

[cmvsm]

I think that the ones who lose out is Apple in the 'scalper' scenario. If you begin to alienate some of your core local customers because you can't control your inventory re-distribution, then those customers may begin to explore other areas of purchase, like your Best Buy, Target, and Walmart. The iPad is just the beginning, as Apple may lose a little margin when their customers do not use the Apple store direct, but they may also lose the add on sale, such as cases, software, etc., or any other peripheral that might go along with the purchase. This is most likely where Apple makes up some of their margin, and by not controlling these scalpers, is allowing their customers to shop elsewhere in the interim.

Not a good move from a financial standpoint. Maybe next time they will have their pre-orders.

 

[bluebermuda]

I think that the ones who lose out is Apple in the 'scalper' scenario. If you begin to alienate some of your core local customers because you can't control your inventory re-distribution, then those customers may begin to explore other areas of purchase, like your Best Buy, Target, and Walmart. The iPad is just the beginning, as Apple may lose a little margin when their customers do not use the Apple store direct, but they may also lose the add on sale, such as cases, software, etc., or any other peripheral that might go along with the purchase. This is most likely where Apple makes up some of their margin, and by not controlling these scalpers, is allowing their customers to shop elsewhere in the interim.

Not a good move from a financial standpoint. Maybe next time they will have their pre-orders.

Your analysis assumes that Apple has zero selling expense. A sales is a sale regardless if the sale comes straight from Apple or is generated by an authorized retailer. A sale through a retailer simply passes the selling expense on to the retailer. In the end Apple incurs a cost of sales line item composed of direct to consumer expense as well as a cost of sales component that is implicit in the retailer channel product discount.